What is the extent of destruction that hacking posed in our society?

Excerpt from the essay of Ronald B. Standler from http://www.rbs2.com/cvirus.htm
Economic Damage
There are many different harms resulting from malicious programs:
• Many malicious programs delete or alter data in files on the victim’s hard drive. Recovering from such an attack requires either the use of a backup copy or tediously regenerating the data.

There will always be lost data after the last backup. The amount of lost data will be less than one day’s work, if one makes daily backups. However, daily backups are rare amongst computer users at home and in small offices. That means most victims will lose days, or even weeks, of wordprocessing and financial data. The value of that lost data far exceeds the cost of the computer hardware.
• Many malicious programs alter the Microsoft Windows registry file. All of those alterations must be undone, in order to recover from the malicious program.

Many malicious programs attach themselves to parts of the operating system or applications programs.

In some cases (e.g., CodeRed), the best recovery is to reformat the hard disk drive, make a clean installation of the operating system, then install all of the applications software, and finally copy all of the user’s data files from backup media. Such a process can take many hours if the user is familiar with the process and has a recent backup copy of the data files. Alternatively, if one has used special backup software that copies the entire operating system (including hidden files), all applications software, and all data files onto recordable media (e.g., compact disks or a tape cartridge), then one can use that media to recover more quickly.
• Malicious program that propagate by e-mail clog e-mail servers with millions of copies of a virus or worm, thus delaying receipt of useful e-mail, or causing valid messages to be lost in a flood of useless e-mail. Some companies switch off their e-mail servers during epidemics of malicious programs transmitted by e-mail, to prevent crashing their server, but that makes valid e-mail undeliverable. Many businesses rely on prompt delivery of e-mail for their routine operation, and slow e-mail will cause financial losses, such as the cost of lost productivity.

There is no definite information on the exact cost of recovering from an epidemic of a malicious program.

A quick calculation shows that the damage inflicted by a malicious program will be immense. Some of these malicious programs infected more than 105 computers worldwide. If the cost of removing the program from each computer is only US$ 200 (a very low estimate), then the total harm exceeds ten million dollars. This quick calculation shows that the cost of each widespread malicious program will be more than US$ 107, but we do not know how much more.

The estimated costs in the following table are from Computer Economics in January 2002. Journalists who write news reports about malicious programs commonly use damage estimates provided by Computer Economics.
name of program estimated US$ cost
Melissa 1.10 × 109
ILOVEYOU 8.75 × 109
CodeRed 2.62 × 109
SirCam 1.15 × 109
Nimda 0.635 × 109

The cost of recovery from malicious programs after ILOVEYOU was reduced by the availability of software tools from anti-virus software companies that automate much of the process of removing a worm.
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Sources of Information
Early History of Malicious Programs
The following online resources describe the early history of malicious programs:
• Robert M. Slade, History of Computer Viruses, 1992. Posted at Univ. Wisconsin and cknow.com.
• Alan Solomon, A Brief History of PC Viruses, 1993 (?). Posted at Univ. Wisconsin and cknow.com.
• Joe Wells, Virus Timeline, 30 Aug 1996.
• Eugene Kaspersky, Computer Viruses, Nov 1998.

Some of the damages produced by hacking are the following:
1. Extortionists managed to hack into US power grids and shut them down, PC World reports, citing a CIA analyst speaking at a security conference(http://www.newser.com/story/16862/cybercrooks-hacking-power-grid.html).The analyst said:
“”In at least one case, the disruption caused a power outage affecting multiple cities. We do not know who executed these attacks, but all involved intrusions through the Internet.”
2. The different viruses and worms which caused billions of dollars of damage. As mentioned above, examples are I LOVE YOU virus, NIMDA, CODE RED. Conficker worm has gone its damage up to aso up to $9.1 dollars.

3. Phone phreaking related to hacking also shut down some of the telephone companies and caused a lot of damage.

4. Advancement in technology is leading to the emergence of a new threat in the form of ‘cyber terrorists’, who attack technological infrastructures such as the Internet in order to help further their cause through hacking (http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8G-3W31NRB-6&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=de9715c265c83850832c8e49c569707b).
References:
PC World, Washington Post(2008). Cybercrooks Hacking Power Grid Posted Jan 20, 08 Retrieved May 21, 2009 from http://www.newser.com/story/16862/cybercrooks-hacking-power-grid.html

Danchev,D.(2009).Conficker’estimated economic cost? $9.1 billion Posted April 23, 2009. Retrieved from http://blogs.zdnet.com/security/?p=3207
Furnell, SM. Computer hacking and cyber terrorism: the real threats in the new millennium? Retrieved May 22, 2009 from http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8G-3W31NRB-6&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=de9715c265c83850832c8e49c569707b